The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814

Dear Governor and Legislative Leaders:

As requested by the Joint Legislative Audit Committee, the California State Auditor presents this audit report concerning the State Superintendent of Public Instruction’s (state superintendent) oversight of the Inglewood Unified School District (district).

This report concludes that the district’s finances and operations have not significantly improved under the state superintendent’s control. In July 2012 the district’s five-member school board requested emergency funding from the State, citing the possibility that it would be financially insolvent by January 2013. When the governor signed Senate Bill 533 (SB 533) (Chapter 325, Statutes of 2012), the State provided the district with access to emergency funding and also required that the state superintendent assume control of the district—until such time that both he and his state administrator conclude that the district can sustain the improvements made to its finances and operations.

Despite projecting a balanced budget for fiscal year 2015–16, the district has demonstrated a sustained history of deficit spending, where expenditures exceed revenue. Furthermore, the district is still forecasting declining enrollment that can negatively affect district revenues, which are based on the average daily attendance of its enrolled students. The district cannot continue indefinitely with its pattern of deficit spending, and the state superintendent and his recently appointed third state administrator will have to make difficult financial decisions should the district’s student population, and its related revenue, continue to decline.

The state superintendent also expects the district to make significant improvement in various operational areas, including community relations, personnel management, pupil achievement, financial management, and facilities management. However, after three years, the district is still far from meeting the state superintendent’s expectations. The Fiscal Crisis Management and Assistance Team (FCMAT) annually measures the district’s progress towards achieving these expectations and has consistently concluded that the district has yet to fully implement and comply with various state standards. Achieving and sustaining higher scores from FCMAT is an important milestone towards ultimately restoring local control over the district. However, the state superintendent and his state administrator lack a publicly available action plan that prioritizes FCMAT’s nearly 700 recommendations for improvement. With continually low scores from FCMAT and a continued pattern of deficit spending, those living in the district and other stakeholders may lose confidence in a state-administered approach to recovery.